China’s Rare Earth Stranglehold Tightens—Global Tech & Defense Sectors Brace for Impact

Beijing doubles down on control of critical minerals—while Wall Street still pretends it's 'priced in.'

The geopolitics of tech just got sharper teeth. As of July 2025, China's Ministry of Industry confirms stricter export quotas on neodymium, dysprosium, and other rare earth metals that power everything from EVs to F-35 fighter jets.

Why it matters: No viable supply chain exists outside Chinese oversight. Attempts to revive US or Australian mining operations remain years behind in processing tech—and that's before environmental lawsuits stall progress.

The cynical take: Hedge funds will spin this as an 'opportunity' for synthetic alternatives while quietly front-running the coming shortages. Meanwhile, tech CEOs will keep pretending their 'diversified sourcing' PowerPoint slides actually mean something.

Bottom line: When China sneezes, global manufacturing catches pneumonia. The only question now is which industry will be first to start rationing chips, batteries, or missiles.

China’s rare earth shipments to the US rebounded in June

In a related development, China’s shipments of rare earths and magnets to America rebounded sharply in June. The General Administration of Customs data shows exports climbed to 353 metric tons, a 660 percent jump compared with May’s 46 tons.

That surge followed late‑June agreements aimed at clearing a backlog of export licences for magnets and rare earths bound for U.S. customers. As part of the same talks, chipmaker Nvidia said it plans to restart sales of its H20 artificial intelligence processors in China.

Earlier this year, Beijing had added several rare earth items and related magnets to its export restriction list in early April, a response to American tariffs. The MOVE stalled shipments in April and May, disrupting supply chains. Some overseas automakers reportedly scaled back production amid the squeeze.

Globally, China exported 3,188 tons of permanent rare earth magnets in June, up 157.5 percent from May’s 1,238 tons. Despite the rebound, June’s total remained 38.1 percent below the 5,158 tons shipped in June 2024.

Market watchers expect exports to climb further in July as more firms secure the necessary licences. Still, for the first half of 2025, China’s magnet exports were down 18.9 percent year‑on‑year, at 22,319 tons.

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